Five ways to save on housing costs
By following these five steps, you can lower your housing costs and have more money to spend on other parts of your life.
One key to financial success is lowering your housing costs. Generally about one third of money spent by the typical household goes toward housing. The less you spend each month on housing, including utilities and other fixed costs, the less financial stress you will feel. You’ll also have more money to save toward retirement or for discretionary “fun” spending.
Refinance your mortgage: Interest rates are still low, and worth taking another look. Use an online calculator to estimate how much you will save over the years. If your current mortgage payment is over 31 percent of your income, you might qualify for a loan modification to lower your payments. If you’re not behind on your mortgage payments but have been unable to get traditional refinancing because the value of your home has been declined, you may be eligible to refinance through the Home Affordable Refinance Program (HARP). For HARP, your mortgage must be guaranteed by either Fannie Mae or Freddie Mac. Reportedly 60-70 percent of mortgages originated are either one or the other.
Follow these links to determine if your mortgage qualifies:
- Cut your utility bills: Weatherproofing, thermostat settings, landscaping and water conservation can all make a difference. Check out No to Low Cost Actions to Save Home Energy and Money from Michigan State University Extension for specific information.
- Shrink your homeowner’s insurance costs: Look into paying a higher deductible to save yourself money. Ask about the many discount opportunities you might qualify to receive. Do a comparison shop of three companies. Insurance is necessary and it doesn’t have to be super expensive.
- Fight your property tax assessment: If you feel your property tax assessment is too high, or much higher than neighbors with similar homes, you can appeal to your local taxing authority and potentially save for years to come. Generally in Michigan, January or February is the time of the year to submit an appeal request and it is reviewed by a local review committee in March. Check for errors on your property record and prepare your case.
- Downsize to a smaller home: If your home is too large for your current needs, consider moving to a less costly residence to save money. A smaller home also could mean big savings on mortgage payments, utilities, maintenance and repairs.
MSU Extension is a HUD-approved housing counseling agency and has many MSHDA-certified housing counselors at multiple county offices to assist you by phone or digitally. Find a staff person near you at mimoneyhealth.org. MSHDA certified Housing counselors may be located using http://www.mshda.info/counseling_search/